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That's the one thing about the NPCs in Oblivion (and I'm assuming earlyer TES games) they're rather flat after awhile. I remember starting 
Oblivion, being rather infatuated with all the stuff the NPCs had to say. All the new information and stories they told. But after awhile, 
there isn't much of a reason to interact with the majority of them at all. 
I remember feeling lonely after my current fighter character, Renee Gade II bought her first house in Bravil. How she wanted some sort of 
interaction with someone else. A friend. Not just someone she can buy stuff from or listen to the next Rumor from. Yea, it sounds goofy, 
but it would definately add depth to the game (beyond just looting, killing, stealing, etc). Even back in my tabletop days we had rules for 
relationships. 
As it is now, there's no reason for any character I make to just 'live' in a town. Not much interesting (after awhile) to do. The way 
Oblivion is now, it's fun to go looting and stuff, but there's something missing. 
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What would work is if characters that you can have relationships with had distinct personalities and histories, and unique interactions.  I 
wouldn't want to have an in-game romance with a random NPC who never did anything or said anything unique.  And I wouldn't want a romance 
option to make a mockery out of the character and make it awkward to talk to them because of some creepy romance scene.
Relationships shouldn't be something that you constantly have to monitor, I can understand that if you don't talk to a character for an in
-game week or two they might become more distant.  What gets annoying is when you have to give them a gift every in-game day or else they 
leave you and disappear from existence.
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Disposition should be used for more than getting what we want out of characters or making them feel more like processes run by a program.  
It should shape the way we play choose to play, just as much as our choices with quests should.  We should feel for the characters, like 
you feel for a character when you read a book.  It doesn't mean we're supposed to long for the person to be real, but it does mean that 
we should at least feel bad if they die, and perhaps feel happy if they have a personal quest that turns out well.
I would love a romance option. It would be awesome for my character to be able to interact with someone in a deeper and more meaningful 
manner. I want my character to have something outside of questing to do. Give me some incentive to return home, rather than simply dumping 
off my loot. It wouldn't have to be a huge part of the game (to be honest, I wouldn't really want to have to devote tons of time this), but 
I feel that the game world could really be enriched by simply providing the possibility of a love interest.
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When I first played Morrowind, even with the few mods that were available at the time, my thoughts were exactly the same as above, that 
after adventuring or risking my backside for the world at large, it would be nice to come home, share the bounty of the day, and just 
experience the feeling of winding down until the next adventure taken.  That was the draw and appeal to such mods as Children of 
Morrowind/Family to adopt walking hand in hand with The Ascadian Rose Cottage.  You come home to Minette and the children and the way they 
were scripted, the interaction was far from flat and uninteresting.  The kids, act as kids do.  Minette would wax from the issue of being a 
nanny, to reminding you as a character that were it not for you, they'd be unsafe.  That little emotional drama makes one feel that the 
arrows, blows, and lives one must take are worth it.  Unless of course, one's character taste is more one who just lives for the carnage, 
then such nuances are of no consequence.
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The selected excerpts from previous posts pretty much sum up my personal opinions about how relationships should be included in TES.  I 
think that having more meaningful relationships, whether it be a friend, family, love interest, or spouse, would help to make me feel more 
connected to the world that I'm supposed to be a part of.  It could be the driving motivational factor behind 
WHY my 
character is out there risking his ass day-in and day-out doing whatever it is he chooses to do.  As far as the whole issue of six is 
concerned, I personally don't see that it is necessary for there to be anything more than innuendo and/or implied six (scenes) in the game. 
Though I'm no prude when it comes to six, I think that if a full-blown six scene were incorporated into the game it would come off as 
gratuitous and cheesy.  Besides, six =/= intimacy, and I think most of us would really like to see more intimate relationships develop 
between our characters and the NPCs that he/she interacts with throughout the game before we ever saw pixelated uglies bumping.